MARKET TREND FOR WEDNESDAY, NOVEMBER 30, 2016
NIFTY continued to resist to the
200-DMA at Close and continued to consolidate. It ended with minor gains but
came off considerably from the high point of the day. Today, we keep our
analysis on similar lines and the levels of 200-DMA which is 8157 and 8200 will
be critical to watch for as these two are important pattern resistance levels
that NIFTY will have to move past in order to have a sustainable pullback. The
start today is once again likely to remain subdued and the mentioned levels
will continue to act as immediate resistance for the Markets.
For today, the levels of 8155 and
8205 will act as immediate resistance levels for the Markets. The supports come
in at 8105 and 8050 levels.
The RSI—Relative Strength Index on
the Daily Chart is 41.0081 and it remains neutral as it shows no bullish or
bearish divergence or any failure swing. The Daily MACD has reported a bullish
crossover and it is now bullish as it trades above its signal line. We had mentioned
about possibility of a bullish crossover of this lead indicator in our previous
edition. There are multiple identification of Candles on the Daily Chart. An Inverted
Hammer has occurred. This often signals reversal which requires
confirmation on the following day. A larger observation, a Shooting Star
has occurred. During an uptrend or a pullback, this often signals some slowdown
and temporary weakness. However, this also requires confirmation on the next
day.
On the derivative front, the NIFTY
December series has added over 3.39 lakh shares or 2.30% in Open Interest. This
shows some fresh shorts too have been added with the decline that we saw in the
second half.
Coming to pattern analysis, it is
very much evident that after breaking down from a falling Channel drawn from
8968 levels, the NIFTY went beyond its routine measuring implication and went
on to breach the important support of 200-DMA. Speaking purely on technical
terms, any support once broken becomes a resistance. Exactly on these lines,
the levels of 200-DMA is acting as resistance at Close levels with NIFTY. It
would be crucial for the NIFTY to move past this level and end above that so as
to have a sustainable pullback.
Overall, the NIFTY is currently
facing two important resistance levels at Close. One is 200-DMA and the other
one around 8200-mark which is a pattern resistance in form of the return line
(support line) of the Channel that the NIFTY breached on the downside. Until
the NIFTY manages to move past these levels, we will continue to see the NIFTY
consolidating in a broad range. We advice to refrain from creating major
exposure and dips should be continued to make fresh purchase while thoroughly
avoiding shorts. Overall, continuance of cautious outlook is advised for today.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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